Resource ambidexterity through alliance portfolios and firm performance

• Author: Sali Li,Ulrich Wassmer,Anoop Madhok
• Date: 01 February 2017
• DOI: http://doi.org/10.1002/smj.2488
• Published date: 01 February 2017

Strategic Management Journal

Strat. Mgmt. J.,38: 384–394 (2017)

Published online EarlyView 22 February 2016 in WileyOnline Library (wileyonlinelibrary.com) DOI: 10.1002/smj.2488

Received 21 August 2013;Final revisionreceived 12 November 2015

RESOURCE AMBIDEXTERITY THROUGH ALLIANCE

PORTFOLIOS AND FIRM PERFORMANCE

ULRICH WASSMER,1†SALI LI,2and ANOOP MADHOK3*

1Strategy and Organization Department, EMLYON Business School, Ecully cedex,

France

2Sonoco International Business Department, Darla Moore School of Business,

University of South Carolina, Columbia, South Carolina, U.S.A.

3Strategy and Policy Department, Schulich School of Business, York University,

Toronto, Ontario, Canada

Research summary: Partner resources can be an important alternative to internal rm resources

for attaining dual and seemingly incompatible strategic objectives. We extend arguments about

managing conicting objectives typically made at the rm level to the level of a rm’s alliance

portfolio. Specically, will a balance between revenue enhancement and cost reduction attained

collectively through partner resources accessed via a rm’s various alliances be similarly

benecial for rm performance? Additionally, how do strategic attributes of alliance portfolio

conguration, specically alliance portfolio size and partner resource scope, condition the

balance-performance relationship? Based on data fromthe global airline industry, we nd support

for the balance-performance relationship, though such balance is less benecial for rms in the

case of access to a broader resourcescope per partner.

Managerial summary: Increasing revenue and reducing costs simultaneously can potentially

enhance rm competitiveness. We highlight that an alliance strategy can be an important

alternative to internal resources for attaining such dual strategic objectives, particularly when

partner resourcesaccessed through alliances are treated collectively as portfolios. Weexamine the

importance of balancing product-market extending and efciency-improving partner resources in

the global airline industry as well as the impact of two alternate strategies for accessing resources

through alliances: fewer partners with more resources per partner or more partners with fewer

resources per partner. We nd that resource balance at the portfolio level helps airlines improve

performance. Our results also suggest that managers should be cautious of accessing too many

resources throughjust a few partners. Copyright © 2015 John Wiley & Sons, Ltd.

INTRODUCTION

Extensive work has been dedicated in strategy

research to studying whether or not rms are better

off single-mindedly pursuing a particular strategic

Keywords: alliance portfolios; strategic alliances;

resource-based view of the rm; ambidexterity; airline

industry

*Correspondence to: Anoop Madhok, Strategy and PolicyDepart-

ment, Schulich School of Business, York University, 4700

Keele St, Toronto ON M3J 1P3, Canada. E-mail: amadhok@

schulich.yorku.ca

†Deceased.

Copyright © 2015 John Wiley & Sons, Ltd.

direction or simultaneously pursuing two opposing

directions, and aligning their resources accordingly

in their search for superior performance. On the

one hand, the argument is one of the benets of

focus and the trade-offs due to incompatibility and

inherent contradictions between two strategies,

such as commitment versus exibility, autonomy

versus control or exploration versus exploitation,

among many others. On the other hand, the argu-

ment is one of seeking a balance between the two,

since too dominant a focus on one objective could

result in diminishing returns beyond a certain point

(March, 1991). Yet, notwithstanding the debate,